SCDigest editorial staff

The News: Wal-Mart issues a press release this week basically saying its RFID efforts were still on track, with the next wave of 300 suppliers expected to be delivering tagged cases and pallets on schedule in January, 2007. Another 500 Wal-Mart stores will be RFID capable by the end of the year.

The Impact: As it does periodically, Wal-Mart is simply reaffirming its commitment to the RFID/EPC (electronic product code) program, and touting the benefits. How the Wal-Mart schedule will ultimately impact the various “tipping points” for manufacturers and suppliers is still not clear.

The Story: The Wal-Mart press release (see Wal-Mart Continues RFID Expansion) says it by the end of the year, more than 1000 of its traditional and Sam’s Clubs stores will be RFID-ready. That would represent nearly 25% of the companies U.S retail locations.

In addition, the company said that from this point forward, the company will only accept and read so called “Gen 2” EPC tags, working through any inventory tagged with early versions.

“Recent internal analysis of our ongoing efforts, along with the launch of EPCglobal Generation 2 tags, reinforces the value of this technology for Wal-Mart, our suppliers and ultimately our customers,” said Rollin Ford, executive vice president and chief information officer for Wal-Mart, and former head of supply chain before accepting this new role earlier this year. “We’re aggressively moving forward with the expansion of RFID-enabled facilities.”

The current wave of 300 suppliers is expected to start testing tag shipments in the coming months, and be live in January 2007, though in the past such deadlines have been fairly loose.

Rollins continues to tout the benefits not only for Wal-Mart but suppliers. We continue to work with suppliers to help them see the vast potential of RFID,” said Ford.  “We’re already fully convinced of its value and are ready to step up the pace since we know we are only touching the tip of the iceberg when it comes to the benefits of this technology.”

According to Bear Sterns Phil Alling and Andrew Matorin, in the announcement “Wal-Mart also hinted it would announce some new RFID initiatives that could accelerate its adoption program further.”

As we’ve reported several times in SCDigest, Wal-Mart’s RFID program is now one of several supply chain related programs, including the ReMix program to speed the flow of  fast moving products, the Inventory DeLoad Program to reduce the rate of overall inventory growth, and a broad set of initiatives led by CEO Lee Scott to become more “green.”

Whether given all this the program will keep on track remains to be seen, but Wal-Mart continues to make statements that confirm it’s commitment to doing so.

Do you have any perspectives on Wal-Mart’s announcement? Do you feel the program is and will remain on track? Is there real evidence Wal-Mart is clearly demonstrating the value to suppliers? Let us know your thoughts.